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Trade Setup for Thursday: Top 15 things to know before Opening Bell

The Nifty will face its first immediate hurdle at 10,700, and then towards 10,770 before it moves to its next target placed around 10,800-10,826. All long positions should be placed with a stop below 10,587.

June 07, 2018 / 08:45 AM IST

Markets - Image: Reuters


The Nifty, which started on a bullish note, built on its momentum and rallied past 10,650 after the Reserve Bank of India’s monetary policy committee (MPC) raised repo rate by 25 basis points but maintained its neutral stance.

The Nifty index made a strong bullish candle on the daily charts and has now moved above crucial short-term moving averages such as 5, 13 and 20-EMA.

The Nifty made a bullish candle after a 'Hammer' like pattern, which is a bullish sign and suggests that follow-up buying could be seen in the next few sessions as well.

But, are we out of the woods? Maybe not. The Nifty will face its first immediate hurdle at 10,700, and then around 10,770, before it moves to its next target placed around 10,800-10,826. All long positions should be placed with a stop below 10,587.

The Nifty, which opened at 10,603.45, slipped marginally to 10,587 before bulls took charge of D-Street. The index rose to an intraday high of 10,698.35, before closing 91 points higher at 10,684.

Close

"A robust bull candle on Nifty chart is clearly suggesting that the index made an attempt to start a fresh leg of the upswing from the recent lows of 10,550 which should logically take it beyond 10770 levels," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

"Albeit, the advance-decline ratio is stronger, a tepid participation from Bank index post-RBI monetary policy accompanied with lack of a ‘buy’ signals on any of the technical oscillators on lower time frame charts shall be a cause for concern going forward. Hence, a follow-through buying in next session can be used as a catalyst to confirm the beginning of a fresh upswing," he said.

Mohammad added that a strong close beyond 10,770 can not only confirm that a bottom is in place around the index's recent low of 10,550, but also take it to much higher levels. With the initial target placed at around 10,826, a stop should be kept below 10,587.

The Bank Nifty formed a Hammer candle, followed by a Long Legged Doji Candle on the daily scale indicates that decline was bought. It managed to hold above its crucial rising trend line, which is formed by connecting swing lows of 24,753, 25,662, 25,668 and 26,069.

Now, the index has to hold above 26,250 to witness an up move towards 26,500 and 26,600, while on the downside immediate support is seen at 26,100, followed by 25,950, experts suggest.

India VIX fell 5.78 percent to 12.55. Falling volatility with rising put-call ratio suggests an overall bullish bias in the market.

We have collated the top 15 data points to help you spot profitable trades:

Key Nifty support and resistance levels

The Nifty closed at 10,684.7 on Wednesday. According to Pivot charts, its key support is placed at 10,615.37, followed by 10,546.03. If the index starts moving upward, key resistance levels to watch out are 10,726.17 and 10,767.63.

Nifty Bank

The Nifty Bank index closed at 26,367.6. The important Pivot level, which will act as a crucial support for the index, is placed at 26,201.87, followed by 26,036.13. On the upside, key resistance levels are placed at 26,479.27, followed by 26,590.93.

Call options data

In terms of open interest, the 11,000 call option has seen the most call writing so far, with 41.72 lakh contracts being written. This level could act as a crucial resistance for the index in the June series.

The second-highest buildup was seen in the 10,800 call option, which has seen 34.01 lakh contracts getting written so far. The 10,700 call option has accumulated 31.08 lakh contracts.

The most call writing was seen at the strike price of 10,800, which saw 2.26 lakh contracts getting written, followed by 10,900, which added 1.57 lakh contracts.

Call unwinding was seen at the strike price of 11,000, which shed 3.97 lakh contracts, followed by 10,700, which shed 2.18 lakh contracts .

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Put options data

Maximum open interest in put options was seen at the 10,600 strike price, in which 40.47 lakh contracts have been added till date. This level could be a crucial support for the index in the June series.

The 10,200 put option comes next, with 35.83 lakh contracts being added so far, followed by the 10,500 put option, which has now accumulated 34.57 lakh contracts.

Maximum put writing was seen at the strike prices of 10,600, which added 6.19 lakh contracts, followed by 10,500, which added 5 lakh contracts, and 10,700, which added 1.28 lakh contracts.

There was hardly any put unwinding seen.

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FII and DII data

Foreign institutional investors (FIIs) sold shares worth Rs 81.4 crore, while domestic institutional investors bought shares worth Rs 712.31 crore in the Indian equity market, as per provisional data available on the National Stock Exchange.

Fund flow picture:

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Stocks with higher delivery percentage

A high delivery percentage suggests that investors are accepting delivery of the stock, which means that they are bullish on it.

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95 stocks saw long build-up

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82 stocks saw short covering:

A decrease in open interest along with an increase in prices is generally indicative of short covering.

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22 stocks saw short build-up

An increase in open interest along with a decrease in prices generally indicates a buildup of short positions.

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7 stocks saw long unwinding

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Bulk deals:

Indian Energy Exchange: Societe Generale sold 1,65,325 shares at Rs 1590 per share

Sumeet Industries: Mystique Media bought 7,30,917 shares at Rs 17.12 per share

Vijay Shanthi Builders: Wadhwa Manoj bought 2,89,657 shares at Rs 9.16 per share

(For more bulk deals click here)

Analyst or board meet/briefings:

Mahindra CIE: The company had meetings with multiple investors on June 6, 2018.

Greaves Cotton: Habrock Capital Management will meet the firm on June 7, 2018.

Stocks in the news:

Aditya Birla Fashion: The Board of Directors of the company approved the allotment of 5,843 fully paid-up Equity Shares of Rs 10/- each.

NCLT Admits Videocon Industries Case For Insolvency Proceedings

Hindustan Construction: Company wins Rs737 crore contract for Bangladesh nuclear power plant

Tech Mahindra: Company appoints Harshvendra Soin as Chief People Officer

Syndicate Bank plans to raise Rs 5K cr via securities

2 stock under ban period on the NSE

Securities in ban period for the next day's trade under the futures and options segment includes companies in which the security has crossed 95 percent of the market-wide position limit.

For June 7, Balrampur Chini and DHFL are present in the the F&O ban list.



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Uttaresh Venkateshwaran
Sandip Das
first published: Jun 7, 2018 07:35 am
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